Despite inflation and mounting debt, VantageScore CEO states that U.S. consumers are 'quite healthy' as credit scores rise.

• In September, VantageScore reported that consumer credit scores remained unchanged for the third month in a row, with an average score of 701.
• Lenders use credit scores to evaluate borrowers' repayment capability and determine the interest rate they will charge.
• A score below 660 is considered subprime.

Despite Americans' credit card debt reaching a record high of over $1 trillion, their credit health has remained strong, according to a report from VantageScore.

Despite inflation, rising interest rates, and economic concerns, U.S. consumers have the ability to continue spending.

Silvio Tavares, CEO of VantageScore, stated in a recent interview with CNBC that contrary to popular belief, consumers are not fully utilizing their credit and are actually managing it effectively. In fact, Tavares emphasized that consumers are in good financial health.

Although the credit card debt reached $1 trillion, the average VantageScore credit score remained stable in September for the third consecutive month at 701, which is four points higher than the same month last year.

The latest report from the credit bureau reveals that the national average FICO credit score increased by two points from the previous year, reaching a new high of 718.

Both scoring models use a numerical range of 300 to 850.

Credit scoring models rely on consumer data from TransUnion, Experian, and Equifax to generate credit scores, which are crucial for financial institutions to determine which credit cards, mortgages, auto loans, and personal loans consumers qualify for, and at what rates.

According to Tavares, consumers with a VantageScore of 660 or higher are usually eligible for the best rates. Therefore, this is the optimal range.

He stated that reaching that location would make you eligible for the best interest rates in a rising interest rate environment.

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